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Posted by
GonzoBreath
on 2008-09-29

PUBLIC:

Besides being completely transparent and no-nonsense guys, Leapfrog also fills a large niche on Sand Hill Road for two reasons â€"

They do early stage investingâ€" Every firm will tell you they fund early stage companies, but the fact is you have a snow-ballâ€™s chance in Hades of actually seeing fruit from most firms, especially the larger ones. They will all agree to see your pitch, but not for the purpose of funding you. Leapfrog is one of the few exceptions and does in fact fund â€˜start-upsâ€™. They understand the needs and workings of start-ups very well and make great early stage partners.

They do not require IPO potential â€" For the larger funds, if you do not have the potential for IPO, you simply donâ€™t have enough to move the needle with a 10x exit. With the near extinction of IPOs as of late, I am surprised this attitude survives. Leapfrog is realistic and manages their fund accordingly. Like all funds, the higher the return the better, but, Leapfrog also recognizes there are good deals out there with strong acquisition potential and solid returns.

Leapfrog is a fine friend to the traditional start-up. In our case, we wasted far too many cycles pitching large firms who we had no business pitching to because we did not understand the two points above.